otc
Stylish Dinosaur
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Is that relevant in this case though, as many of the most appreciating assets are non-discretionary? (Housing/food/transportation) Demand won’t/can’t change that much
I think it sort of can still?
Housing: purchase prices are set in an auction format AND are directly tied to interest rates. Less willing buyers, less people thinking it is a good time to upgrade, more expensive financing would all lead to an expectation that housing prices won't continue to surge as much as they did the past few years. Rents follow similar patterns although not as directly.
Food: At some level food is still discretionary. Plenty of substitution to cheaper brands, less fancy choices, etc. for people who aren't already shopping the low end of the market. And again, we're talking about expectations here. We know COVID gave a bunch of CPG/food brands excuses to raise prices, but can we convince people that won't keep happening?
Transport: Similar story to food. Car prices have been high long enough that we are starting to move into what you might call the medium-term where people aren't stuck with their past choices. In the face of high gas prices AND still-high car prices plus increased financing costs, it is about time for many consumers to choose cheaper cars, more efficiency, shorter commutes, etc.